Thoughts on a business that involves renting out physical products?

[TaylorB]

It wasn't a business it was just to make some money for himself. He took over 100K out of that deal after 3 years, not bad for some startup cash. In those same years we were working together I lost about 30-50K in trading options. Each to their own.

 

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[Guest24480]

It wasn't a business it was just to make some money for himself. He took over 100K out of that deal after 3 years, not bad for some startup cash. In those same years we were working together I lost about 30-50K in trading options. Each to their own.

I think what he meant was the guy from the oil company that decided to rent it for three years should be fired, not your friend.


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[TaylorB]

I think its actually really common in the oil field sector. I fly often upto the oil sands in Canada. These are operations that have been around a long time and will continue to be around for a very long time.

Everything around the camp's is rented. The lighting all is rented from hertz. We as the airline are "rented" they used to run their own airline to move their people.

It seems they only want to do OIL and nothing else. Not sure if its liability or what but they keep outsourcing more and more to rental options even though they are in it long term.

 

[Pete799p]

I think its actually really common in the oil field sector. I fly often upto the oil sands in Canada. These are operations that have been around a long time and will continue to be around for a very long time.

Everything around the camp's is rented. The lighting all is rented from hertz. We as the airline are "rented" they used to run their own airline to move their people.

It seems they only want to do OIL and nothing else. Not sure if its liability or what but they keep outsourcing more and more to rental options even though they are in it long term.

This makes sense to me. If you have a job that requires a special piece of machinery for you to complete it and it could produce $30k/mo but you have to spend $15k per month to get it it's really a no brainier. My guess, and I am no expert in the oil industry, is that it is a very equipment intensive business ie lots of capital required, so rather then taking out a ton of debt, that they may or may not have access to they just rent. These companies could already be maxed out on their available credit and I am guessing that banks would charge them a risk premium. It is easier to scale renting because you need less upfront capital and you can move faster. This company only had to come up with $15k for the first month vs. $150k. So if they are sitting on $150k in cash they could rent 10 of these vs. buy one.

I regularly see things like this in the construction industry and most of the contractors will just price the cost of the equipment rental into their bids. We contracted out a large sandblasting contract and the lions share of bids submitted included line items for equipment rental. Even the contractors who owned most of their own equipment still bid very close as they are accounting for the maintenance etc as well as pricing in an ROI for the equipment investment.

 

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[vinylawesome]

Here's an example of a company that had $153,125 in revenue in 2010 and in 2013 has done $85,000,000 in revenue.

They did this by renting out physical items.

Reliant Asset Management

"Builds, acquires, and leases commercial modular office buildings, schools, hospitals, and temporary structures including remote workforce housing."

http://www.inc.com/profile/reliant-asset-management

 

[Guest24480]

Here's an example of a company that had $153,125 in revenue in 2010 and in 2013 has done $85,000,000 in revenue.

They did this by renting out physical items.

Reliant Asset Management

"Builds, acquires, and leases commercial modular office buildings, schools, hospitals, and temporary structures including remote workforce housing."

http://www.inc.com/profile/reliant-asset-management

Interesting. In 2010 they had 4 employees and in 2013 they had 145. Shows that to scale your business, addition of employees is critical. You can't do it all yourself

 

[D11FYY]

Amazing the growth of that company. Their website has a good amount of information on it also. http://www.rammodular.com/

 

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[Guest24480]

What do you guys think about a renting approach that targets college students? Would this be a profitable niche to approach? In my experience, most college students don't have the money to drop a bunch on new appliances/electronics for apartments or dorms, and would be willing to rent as a result. Thoughts?

 

[Mr.International]

It's pure profits right now.

Cost for me was: 5x shipping containers ($3k each); so = about $20k with everything paid for and delivered.

I rent them out to construction companies: $500-600 a month (2500-3000 a month). I currently deal with 1 company who's renting 5 from me a month. So I already made back my money + profits in year 1, now it's all pure profit (I'm 20, it's a nice little passive income while I'm in university).

I'm looking for ways to scale, to get more construction companies, aiming for 10-30k a month (so need about 20 containers out, which doesn't seem like a lot...). If you find customers and you can scale, you can make amazing profits. Most people in my area (Toronto) sell the containers... I couldn't find a lot that rented. So I decided to hit that market. Construction companies would rather rent since they're mostly seasonal, so why carry the extra inventory when its just sitting there when you can just rent.

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[Mr.International]

Interesting business model. Are theses containers for living or for shipping? Do you pay a company to move the containers to and from job sites? If so what do you pay? Do you make the construction companies sign long term contracts or pay month to month? Does your monthly fee include moving? Thanks for your time.


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[Mr.International]

Interesting business model. Are theses containers for living or for shipping? Do you pay a company to move the containers to and from job sites? If so what do you pay? Do you make the construction companies sign long term contracts or pay month to month? Does your monthly fee include moving? Thanks for your time.


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@MoneyDoc


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[DeletedUser12]

Been mentioned before in another thread but I still think the moving crate idea is good -- people are always moving:
https://www.zippgo.com/

 

[Harley]

Been mentioned before in another thread but I still think the moving crate idea is good -- people are always moving:
https://www.zippgo.com/

Lots of these springing up. Dragon's den canada invested in one called frog box and they are huge now

 

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